Russell Vale Colliery will lose half of its workforce after a series of major safety incidents led the government regulator to impose restrictions on the mine.
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Workers have been told that 80 contractors have already been laid off and another 100 permanent jobs will go, causing morale to plummet among employees.
The Mercury understands there have been at least five serious safety incidents at the Wollongong Resources coal mine in about six months, including instances of frictional ignition, or gases being set alight.
A mine worker speaking on the condition of anonymity said there had been a number of frictional ignition incidents in recent months, and while no one was injured, these represented serious safety breaches.
A Department of Regional NSW spokesperson said the NSW Resources Regulator was investigating an "ignition incident" that occurred on January 5 and had issued an order restricting activities.
"It is understood that excess methane was released when mining through a gas drainage borehole which led to the ignition," the spokesperson said.
"The flame was extinguished within 20 seconds with a hand-held fire extinguisher.
"The Resources Regulator has issued a prohibition notice which is currently in place, restricting mining activities in the locality of the ignition incident."
The spokesperson said this was "not the first incident of this nature at the mine" but as an investigation was underway, it was inappropriate to comment further.
However, they said the compliance history of an operator was considered in all investigations.
Mining and Energy Union district secretary Andy Davey said the regulator had put restrictions on the colliery in relation to several safety breaches.
Mine employees began receiving letters on Wednesday notifying them that their job was gone, but were first informed by the company that contractors had been cut and permanent jobs were on the line a week prior.
The worker told the Mercury it was only on Monday, January 15 at a second meeting that the company confirmed 100 permanent staff would also go, but did not specify who.
Mr Davey said that Wollongong Resources made a decision to stand down all contractors on site and was reviewing the number of permanent employees.
The worker said the company put the job cuts down to difficulties retrieving coal due to strata issues and gas problems, although the general consensus among employees was that the latter could have been better managed.
The worker said the mine had three cutting areas, or panels, that produced coal but the company's plan going forward was to have just one.
They said the company's handling of the job losses had led to "very high tensions and low motivation".
"The atmosphere there now is really bad, and I've hated going to work the last week - and normally I love my job. It's not good," the worker said.
They expected their position would be among those to be cut and while they had begun looking for potential opportunities elsewhere, the worker said there were many apprentices and people starting out in their career who might not find other places to go.
In mid-2023, the mine laid off 40 workers following an underground methane explosion in May and it was only in September that it resumed operating at full capacity.
The mine returned to operation in September 2021, having lain inactive for six years.
Wollongong Resources did not respond to questions.
Natalie Croxon
Reporter at the Illawarra Mercury, mostly covering social affairs. Previously of the Bendigo Advertiser, Northern Daily Leader and Quirindi Advocate. Our Watch award winner.
Reporter at the Illawarra Mercury, mostly covering social affairs. Previously of the Bendigo Advertiser, Northern Daily Leader and Quirindi Advocate. Our Watch award winner.
